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The tax lawyers involved in the most innovative transactions of the last year comment on how they were put together

In the pre-Budget speech in December 2003, UK real estate investment trusts (REITs) moved one step closer with an endorsement from the Chancellor, Gordon Brown, who confirmed that a consultation document on REITs would be issued with the Budget in March this year. Legislation to introduce UK REITs is unlikely, however, before 2005.

The recent Arrowtown decision has put the onus on taxpayers to have sound commercial reasons for each step of their stampable transactions in Hong Kong. Otherwise, they could be challenged, warns William Thomson of White & Case

Type of deal Valuer Acquirer Target Adviser to acquirer (tax) Adviser to target (tax) M&A ?1.3 billion ($1.6 billion) Boyd Gaming Corporation merger with Coast Casinos Coast Casinos Boyd Gaming Corporation advised by Cravath, Swaine & Moore, New York, Lewis Steinberg Coast Casinos advised by Gibson, Dunn & Crutcher, Los Angeles, Stephen Tolles, Dora Arash M&A ?1.2 billion ($1.5 billion) Sacyr Vallehermoso SOMAGUE SGPS Uría & Menéndez, Madrid, Rafael García Llaneza Gonçalves Pereira, Castelo Branco & Associados M&A DKr875 million ($150 million) Triton Advisers DSV Miljø Linklaters, Stockholm, Lars Jonnson, Sara Jacobsson Luxembourg, Paul Tulcinsky Mazanti-Andersen, Copenhagen, Hanne Magnussen, Flemming Otzen M&A $54 billion Comcast launched a hostile bid for The Walt Disney Company The Walt Disney Company Davis Polk & Wardwell, New York, Avishai Shachar Dewey Ballantine M&A $4 billion Juniper Networks agreed to merge with NetScreen Technologies NetScreen Technologies Wilson Sonsini Goodrich & Rosati, Palo Alto, Ivan Humphreys Fenwick & West, Palo Alto, Ronald Schrotenboer M&A $493 million Commercial Capital Bancorp Hawthorne Financial Corporation Patton Boggs, Washington DC, Norman Antin, Jeffrey Haas Manatt Phelps & Phillips, Palo Alto, David Herbst, Donald Fitzgerald M&A $5.8 billion Regions Financial Corporation Union Planters Corporation Sullivan & Cromwell, New York, Ronald Creamer, Katherine Eldred Wachtell Lipton Rosen & Katz, New York, Adam Chinn M&A $2.68 billion L'Air Liquide has agreed to acquire the industrial gas activities of Messer Griesheim Messer Griesheim Debevoise & Plimpton, London, Peter Schuur Freshfields Bruckhaus Deringer, Cologne, Stephan Eilers M&A £327 million ($615 million) P&O agreed to buy a 25% interest in Royal Nedlloyd Royal Nedlloyd P&O in-house, Derek Shaw KPMG, London, Robert Turnbull, Rosalie Lockwood Amsterdam, Rob van Moorsel; Freshfield Bruckhaus Deringer, London, Helen Lethaby, Jonathan Cooklin KPMG, Rotterdam, Rob Truijens, Gilbert Kortenaar M&A ?285 million ($363 million) Electra Aliplast Ashurst, Paris, Catherine Charpentier; London, Richard Palmer Stibbe, Brussels, Luc De Broe Type of deal Value Issuer Lead managers Adviser to Issuer Adviser to lead managers Securities Issue ?7 billion ($8.9 billion) Banca Monte dei Paschi di Siena JP Morgan Securities Clifford Chance, New York, David Moldenhauer, Wei Cui Linklaters, New York, Francisco Duque Rome, Massimo Agostini Portfolio financing £400 million ($756 million) RWE Innogy The Bank of Tokyo-Mitsubishi, ABN Amro, BNP Paribas, Fortis Bank, Royal Bank of Canada, Bank of Scotland, Bayerische Hypo- und Vereinsbank Linklaters, London, Michael Hardwick, Dominic Winter, Gideon Sanitt, Roland Shaw Allen & Overy, London, Brenda Coleman, Jonathan Chapper, Ben Eaton Leveraged and mezzanine loans transaction Undisclosed Alcentra Deutsche Bank Linklaters, London, John Lindsay Ashurst, London, Ian Johnson IPO $675 million TRW Automotive Holdings Corporation Morgan Stanley Simpson Thacher & Bartlett, New York, Gary Mandel Cravath, Swaine & Moore, New York, Lewis Steinberg, Anne Kim Securitization £500 million ($956 million) First Flexible No. 6 Deutsche Bank and JP Morgan Lovells, London, Lindsey Bainton, Mervyn Flatt Weil, Gotshal & Manges, London, Andrew Norwood Notes issue $120 million OJSC Bank Petrocommerce Standard Bank London and ABN AMRO Bank Lovells, London, Lindsey Bainton Linklaters, London, Stephen Taylor; Moscow, Victor Matchekhin

Korea's National Tax Service announced on February 16 that it will defer tax audits for job-creating companies. Companies operating in Seoul that boost their hiring by more than 10% over the previous year will have their tax audits deferred until the end of 2005. Qualifying companies in other regions will enjoy the benefit until the end of 2006.

By Andre Guelman, Dias Carneiro Advogados in association with Uría & Menéndez

Legislative Decree 6 of January 17 2003, reforming Italian company law, with effect from January 1 2004, introduced in the Italian Civil Code (the ICC) specific rules related to groups.

Germany enacted many changes in its value-added tax (VAT) law in December 2003. Most, but not all, of the changes took effect on January 1 2004. A bare bones summary of the affected areas of VAT law is as follows:

On February 12 2004 Advocate General (AG) Kokott issued her opinion in the Weidert and Paulus case (C-242/03). According to the AG, the fact that Luxembourg grants an income tax investment allowance for investments in shares of domestic companies but not for investments in shares of non-resident companies violates the free-movement-of-capital principle (article 56 of the EC Treaty) because it puts investors in shares of foreign companies and foreign companies seeking Luxembourg investors at a disadvantage. Such a restriction cannot be justified by coherence of the Luxembourg tax system or by article 58 of the EC Treaty, which prohibits arbitrary discrimination or disguised restrictions on the free movement of capital.

The UK Inland Revenue launched a surprise attack on relief for trading losses through partnerships last week. Although the February 10 announcement did not specifically mention the film industry, which the government has repeatedly pledged to support with tax incentives, funding for many UK films was jeopardized.